17 Mar CHOOSING THE CORRECT AWARD
How do I know if I’m paying my staff on the correct award?
With over 100 awards to select from, it can be very challenging for employers to feel confident that they are paying their employees correctly. It is also highly likely that more than one Award will apply for many businesses, all with slightly different provisions and entitlements. For example, if you were a manufacturing business that sells your produced goods using your in-house marketing team and an in-house sales team (some of whom work from the office and some of whom are out on the road), you would find there are several awards to be applied.
Three questions to ask yourself when selecting an Award are:
a) Is there an award that covers the industry in which your business operates?
b) Does the industry award in which your business operates cover the specific occupations employed by your business?
c) Where 1 and 2 do not apply, is there an award that covers the specific occupation of each employee?
In our example above, your production and warehouse teams are likely covered by the Wholesale (industry) Award and the sales team could be covered by the Wholesale (industry) Award or Sales (occupational) Award, depending on where they perform their work. The marketing team might be covered by the Graphics (occupational) Award or if the roles are primarily marketing administration, they are likely, along with other administrative employees, to be covered by the Clerks (occupational) Award.
But, what about your managers? Does an Award cover them, or are they Award free? Well, the answer to this is that it depends:
a) Are they a high-income employee who earns more than the current Fair Work threshold of $158, 500? If yes, they would be Award free.
b) Is ‘manager’ just a title and the duties being undertaken covered within the definitions of the classification schedule of the Award? If yes, it is likely they are covered by an Award. If no, and although they are paid less than the Fair Work threshold, if they are performing professional responsibilities of a senior, strategic nature not within the scope of a classification definition contained in the Award, they are likely to be Award free.
One of the most significant risks with Award non-compliance is being labelled a ‘wage thief’ despite best intentions to get it right. Large and highly reputable companies such as Woolworths, Coles, Caltex, the list goes on, have all been named and shamed and had their brands damaged. The Fair Work Ombudsman does not accept ignorance as an excuse.
Paying employees under the correct award is vital to comply with the payment and application of provisions such as minimum pay rates, overtime, penalty rates, breaks, part-time employee rules and a host of other entitlements.
What can you do to protect your business from being branded a ‘wage thief’.
a) Conduct an annual compliance audit of each employee against the relevant award, or if your employee is award free against the National Employment Standards.
b) Provide training to your managers to ensure they apply Award provisions correctly, such as when creating rosters or creating contracts of employment for new employees.
c) Contact Business 360 for expert guidance and advice on Ph 1300 287 360 or email us at email@example.com.